Avanos Medical Inc (AVNS)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	-396,200	4,200	74,000	8,900	-46,100
Total assets	US$ in thousands	1,154,200	1,692,400	1,786,900	1,594,600	1,672,800
Operating ROA		-34.33%	0.25%	4.14%	0.56%	-2.76%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $-396,200K ÷ $1,154,200K
= -34.33%

The operating return on assets (Operating ROA) for Avanos Medical Inc has exhibited significant fluctuations over the years, ranging from negative to positive values.

1. As of December 31, 2020, the company reported a negative operating ROA of -2.76%, indicating that the company was experiencing challenges in generating profits from its assets used in operations.

2. By December 31, 2021, Avanos Medical Inc managed to improve its operating ROA to a modest 0.56%, suggesting a slight recovery in its operational efficiency and profitability.

3. The performance further improved by December 31, 2022, with the operating ROA standing at 4.14%. This significant increase indicates that the company became more effective in utilizing its assets to generate operating income.

4. However, the operating ROA dropped to 0.25% by December 31, 2023, which could potentially signal a decrease in operational profitability or efficiency compared to the previous year.

5. Notably, the operating ROA witnessed a substantial decline to -34.33% by December 31, 2024, reflecting a significant negative impact on operating income relative to total assets employed, which warrants a closer examination of Avanos Medical Inc's operational performance during that period.

In conclusion, the trend in Avanos Medical Inc's operating ROA indicates varying levels of operational efficiency and profitability over the years, underscoring the importance of continuous monitoring and analysis to ensure sustainable financial performance.